Indonesia's coal price cap encourages the consumption of coal while slowing the integration of renewable energy into the country's power grid.

KEY MESSAGES

• A price cap on mandatory sales of Indonesian coal to Perusahaan Listrik Negara (PLN), the state-owned electricity company, distorts the market and locks in coal consumption
• There are five other viable strategies to shore up PLN's finances without harming the integration of renewable energy into Indonesia's power supply
• While subsidy reforms may affect consumer power prices, there are additional strategies to offset these impacts